NFT or Non-Fungible Token, is a unique identifier that denotes ownership. These tokens reside within the Web3 ecosystem on a special blockchain, and owners keep their NFTs within digital wallets.
Currently, most people understand an NFT as a piece if digital art. A better way to describe NFT is: an ownership contract with incentives.
For art-based NFTs, known as collectables, the token itself serves as the incentive, as it doubles up as a unique piece of art. Some people buy these collectibles for the art itself, while others foresee appreciation of the arts value.
However, there is a lesser-known type: Utility NFTs. These tokens, while still maintaining an artistic element, afford holders value beyond the art itself in the form of certain privileges. In most cases however, these privileges are yet to provide any tangible value beyond the Web3 ecosystem.